CURRENT SUPPORT BRIEF POLAND TO GO-IT-ALONE IN DESIGNING HUGE TIRE PLANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001200130001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 12, 2016
• Document Release Date: May 20, 2002
• Sequence Number: 1
• Publication Date: March 16, 1962
• Content Type: BRIEF

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CIA/RR CB-62- 25
T~
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Copy No. r
16 March 1962
CURRENT SUPPORT BRIEF
POLAND TO GO-IT-ALONE IN DESIGNING HUGE TIRE PLANT
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
State Dept. review completed. On file DOC release instructions apply.
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
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POLAND TO GO-IT-ALONE IN DESIGNING HUGE TIRE PLANT
In a surprise development in January 1962, Poland indicated
that it had abandoned plans to buy technology for a huge tire plant
from the Free World, and instead would design the plant itself.
The Poles withdrew from negotiations to buy technical data from a
US company when the firm failed to obtain an export license from the
US Department of Commerce by a 1 January 1962 deadline. Moreover,
they stated their unwillingness to pay the price charged for designs
and equipment by competing firms--presumably British. It appears
possible that Poland's decision also reflects. promises of technical
assistance from the USSR. In any case, the Polish decision will
probably increase the cost and delay the completion of the tire
plant, which was originally scheduled to be opened in 1965 at Olsztyn,
and which is to supply most of Poland's additional needs for motor
vehicle tires through 1975.
As early as mid-1960 Polish officials were reported to be ne-
gotiating with the British "Rustyfa"* consortium.2/ In the fall of
1960 the Polish press reported that construction of a tire plant
with an annual capacity of 3.5 million tires would begin in 1.961 at
Olsztyn, that the "technical documentation" was then being worked
out in Britain, and that the UK would supply 70 percent of the
equipment for the plant and would train some of the personnel,3/
The cost was to be 1.26 billion zlotys (approximately US $40 million),
including 0.5 billion zlotys for imported equipment and technology.4/
In May 1961 it was announced that the start of construction had been
set back until 1962, but no mention was made then :or subsequently
of imports of British technology and equipment.5/
Meanwhile, there were indications that the Poles had also been
negotiating with US firms for erection of the same plant. In late
1960 and in 1961 representatives of US firms discussed the project
with Polish officials,6/ and an application to export technical
data valued at $2.5 million was made to Commerce in July 1961.7/
On 11 December 1961, this application was denied, as has been the
case with all previous requests to export US technical data in this
field to the Bloc.8/ On 25 January 1962 this decision was rescinded
and Commerce was authorized to approve the license if the applicant's
request was reinstated.9/ By this time, however, the Poles ap-
parently were not interested in buying this technology from the US.
Officials of the Polish trade organization, Polimex, explained to
American Embassy officials and to the US firm involved that they
were "forced to buy from another direction,,'--although the US terms
for almost the identical services were preferable--because the ex-
port license was not forthcoming by 1 January 1962.10/ The Poles
said heavy pressure had been exerted by the Planning Commission to
begin construction of the tire plant.
Although representatives of the US firm involved seemed t,o
think the British "Rustyfa" group was going to get the contraot,
the Poles apparently gave no such indication. When questioned by
US Embassy officials, Polimex officials declined to name an alter-
nate supplier,ll/ On 27 January it was stated in the Polish press
*"Rustyfa"' (Russian tire, fact6r-y)--a consortium of British ~ fitm6
.which previously had constructed the tire factory-at'Dneprapetrovsk
in the Ukraine,. The plant went into operation in 1961.1/
March 1962 CIA/RR CB-62- 25
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that "firms which made an offer for the delivery of designs and
equipment charged more than we are in a position to pay," that the
designs and part of the equipment would be made in Poland, and that
the equipment which could not be made in Poland would be purchased
from Czechoslovakia and from the Free World.12/
Both the completion date of the plant and estimates of its cost
have been revised. The article cited above stated that the Designing
Office of the Rubber Industry in Warsaw should have a preliminary
design ready by the end of 1962, that blueprints would be prepared
in 1963 and that the plant might open in 1966 rather than in 1965
as originally planned. Previously on 16 December the Polish radio
reported that construction of the Olsztyn plant would begin in the
second half of 1962 and that the cost would exceed 2 billion zlotys,
a significant increase over the earlier estimates of 1.26 billion
zlotys (1960) and 1.4 billion zlotys (1961),13/ and one which cannot
be accounted for by any general rise in construction prices. On
2 January 1962 the Polish press claimed the blueprints of the new
plant were "already well advanced" and that technicians were being
trained in '.other cities."14/
The importance of the Olsztyn tire plant to Poland is evident
from a consideration of projected tire production and requirements.
At present Poland has only two tire plants located at Poznan and
Debica which are scheduled for modernization and combined output of
which is to be increased from 1,600,000 motor vehicle tires in 1960
to 2,500,000 tires in 1965. However, Polish requirements for motor
vehicle tires are expected to total 2,900,000 units in 1965 and to
reach 5,600,000 units in 1975. Output of the Olsztyn plant, which
is to be one of the largest in the Bloc, is to fill the gap.15/
At present the Bloc is troubled with tire shortages and has
problems with quality, factors which increase the urgency for Poland
to complete the Olsztyn plant. According to available information,
a severe shortage of tires is harassing the Soviet economy at the
present time.16/ For obvious reasons, the USSR already has com-
pleted the purchase of one tire plant from the Free World*.and is
having at least one more built by Free World engineers.17/ In May
1961 East Germany complained at a meeting of CEMA's work-Ing group
for the rubber industry that the quality of East German tires had
been lowered because of a lack of modern equipment and that East
Germany has been unable to obtain tire-making equipment on a large-
scale from other CEMA countries.18/ Rumania is also buying a tire
plant from the British.
At the same time the USSR is reported to be supplying techni-
cal assistance in tire-making to Bloc and non-Bloc countries, in
part through the CEMA mechanism. In 1959 the USSR was assigned
major responsibility for preparation of standardized designs for a
tire plant and in 1961 agreed to supply East Germany with all the
technology necessary for planning of two tire plants.l9/ Moreover,
the USSR recently agreed to supply Ceylon with a small tire plant
(250,000 tires per year).20/ An unconfirmed Polish press report of
November 1961 concerning Polish-Soviet cooperation through 1980
stated that the USSR is to supply Poland complete equipment for an
automobile tire plant with an annual production of 3.5 million
units.21/
*See footnote on page 2.
.16 March 1962 CIA/RR CB-62- 25
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